6 Lessons I Learned When Trying To Identify A Profitable Market Niche

Of course, looking for a profitable market niche if you are an entrepreneur can seem a lot like the search for the holy grail or the philosopher's stone.

Aside from the similarities with Arthurian legends, finding a profitable market niche is your must if you want to be an entrepreneur and live comfortably serving your clients. Contrary to legends, business assets can be created, expanded, and developed into a reality.

It is a matter not only of luck, as is often assured, but of preparation, perseverance and trying again and again.

It is my goal in today's post to tell you what I have learned from trying to identify a profitable market niche. Please do not take it as a decalogue but rather as a guide from which you too can draw some conclusion.

Lesson # 1: You will seldom get it right the first time

Unfortunately it is. It doesn't matter how well you do your market research or how clear your ideas are. The reality of the market will change them completely.

I still remember how in 2000 we launched a B2B project designed to sell information previously extracted on the Internet to companies. We created a repository where information was classified and stored and where a subscriber could access their industry information in exchange for a monthly fee. That failed miserably and we had to make a major turnaround from the initial approach.

We failed. It was the logical thing to do.

The point is not that you are going to fail, everything you think you know or know will not be 90% fulfilled, if not to do it in a way that does not kill you. Fail fast, fail cheap, and come back for more.

A market study is helpful in finding or identifying a profitable market niche. Yes, of course. But that does not mean that you are capable of exploiting it. You need to provide an offer that reaches and adds value to that market niche. And that is very complicated.

Lesson # 2: Benchmark Established Companies

If the market niche you have identified has no competitors ... be careful !!! Most likely, there is no market, much less a profitable market niche.

So make sure you choose a niche with competitors and do your research on them:

• Billing
• Products
• Logistics
• Production systems
• Business models

Anything you can find out, research it and document it appropriately. This will give you clues to better take the next step. There is no company or business that does not copy and improve what it has seen in a market. Even copying innovative ideas can help us.

Lesson # 3: Know well what you can do better

If you know well what supply is in a market and what relationships are established between producers and customers, you will be one step away from finding out what you can improve and contribute to that market again.

It is about bringing something new and different that of value to the market. But let it be in your hand.

In this way, you will be forced to present an innovative offer. Something different that you and no one else can offer in the market where you hope to enter.

This is the basis of all Start Up that scale in a market. I'm not saying that you are prepared to do this as soon as you land in a niche market, but at some point, if you want to make it profitable for you, you will need to reach that stage of development. Otherwise you will end up being one more.

So be prepared because you will need to invest time and resources in developing a prototype or a really irresistible offer for your clients. This is what happened to us with Intelligent Watcher, our new competitive intelligence platform. Platform that has taken us 2 years to develop. And that we continue to perfect.

If you know well that you can improve and you do it, you will be in a position to win a profitable market niche for yourself. And for this, creating a prototype of a new idea for the market and testing it is the best way to ensure that you develop an offer that allows you to reach a profitable market niche.

Lesson # 4: Get visibility for your project

As important or more than creating an innovative offer to be able to exploit a profitable market niche or any market, it is to have enough visibility to publicize your offer and be able to scale in a market. This is something that most entrepreneurship projects lack. Visibility!

And as a general rule, it is one of the aspects that is least worked on and that unfortunately is the most determining factor in facilitating success in order to gain a profitable market niche. It does not matter if you are creating a Start up and have the support of important investors or if you are a modest entrepreneur who begins to sell hours and services.

In any version of the venture you need visibility. And it is, it is a quality without which I have seen many interesting projects fail.

My advice is that you start building from the beginning of your adventure, even before having a prototype of your product, your own digital platform. Where you make yourself known and where you can start building a list of clients.

To do this, you will need to create a web page where you provide valuable content and install a form to capture emails.

Does it sound familiar to you?

Emprenderalia, is a very good example of what I am telling you. Ask Xavi how long it took him to build his platform and generate enough traffic to start billing something. You can see how he has also built his offer with a course for entrepreneurs.

I assure you that it will take at least 24 months to activate a digital platform that generates enough traffic to feed your business. I tell you this knowingly from our own experience with Intelligence Papers where we have been working for almost 5 years to generate visibility for our offer.

But this time is perfect to develop your offer. Meanwhile, you should think about where your income can come from:

• Sale of services
• Investors
• Working as an employee for other companies

That is why you should start developing your digital platform as soon as possible. Until recently, the digital market was closed to entrepreneurs who did not have a significant marketing budget.

Now thanks to Wordpress, social networks and digital marketing that window is open to everyone.

Lesson # 5: The ideal client for you is the one who defines the profitable market niche

This is something that we must be very clear about when we undertake. We must define an ideal client for us.

The goal is to keep in mind who we want to serve. During the entrepreneurship stage this client will change and you will probably have to accept orders from clients that do not suit you at all just because you need money like food.

Even so, if you are looking for a profitable market niche, make sure that your clients:

• Have a high purchasing power: keep in mind that creating a business that competes for costs is something difficult to achieve and that only the most efficient projects achieve it. So if your project is not going to exploit the Low Cost concept, your best strategy is to look for clients who can pay for what you do.
• Appealing to pain is better than appealing to desire: what I mean is that you try to solve a problem that really hurts a group of clients. And that you solve it with solvency. This is key to winning a market niche and making it profitable.
• Transform investment spending: if your offer is perceived as an expense, it is more likely to be rejected. So try to turn the concept around and always sell it as an investment. Especially if you are working in a B2B market niche

If you can, specialize in solving a painful problem for clients with a high purchasing power and also that they perceive that with your offer they are investing in them, then you will have managed to get hold of a crisis-proof and very stable market.

It is not easy but if you get it, it is life insurance for your business and your family.

Lesson # 6: Find out when to throw in the towel

This is very important. 9 out of 10 entrepreneurs do not succeed with their ideas in the market. It is important to know when to say enough. Your health, not just financial, and that of your family depend on it.

Don't sacrifice everything to one card. Try to avoid entrepreneur fever and don't risk more than you owe.

Combining other sources of income with your dream of creating your company is something I recommend. You don't want to go into the casino to gamble everything on red or black. Searching for a profitable niche should never feel like gambling.

I hope you enjoyed this entry on the lessons I have learned trying to identify a profitable market niche. If so, I invite you to share this article with your friends on social networks.